The ‘I-140 Stage’ and the ‘Ability to Pay’

The Administrative Appeals Office (AAO) recently dismissed an appeal brought by a U.S. petitioner, a convenience store. The issue of the appeal was whether or not the petitioner had the ability to pay the proffered wage as of the priority date and continuing until the beneficiary obtained lawful permanent residence. The petitioner sought to employ the beneficiary permanently as a Manager. The ETA 750 was accepted on March 28, 2001, and the proffered wage was $18.00 per hour ($37,440.00 per year). In order to prove the ability to pay, the USCIS requires that a petitioner demonstrate financial resources sufficient to pay the beneficiary’s proffered wages from the time the labor application is accepted until the beneficiary attains permanent resident status. According to regulations, evidence of this ability shall be in the form of copies of annual reports, federal tax returns, or audited financial statements.

In determining whether the employer has the ability to pay, the USCIS will first examine whether the petitioner employed and paid the beneficiary during that period. If the petitioner can show that it employed the beneficiary at a salary equal to or greater than the proffered wage, the evidence will be considered prima facie proof of the petitioner’s ability to pay the proffered wage. However, if the petitioner does not establish that it employed and paid the beneficiary, the USCIS will then examine the net income figure reflected on the petitioner’s federal income tax return. Net income results after subtracting costs and expenses from total revenue.

In the aforementioned case, at the time the labor was submitted, the beneficiary was not employed by the petitioner. Accordingly, the USCIS chose to review the petitioner’s net income figures. As a result, the petitioner’s federal income tax returns were insufficient to pay the beneficiary the proffered wage, therefore, the USCIS elected to review the petitioner’s net current assets. Net current assets are the difference between the petitioner’s current assets and current liabilities. To clarify, net current assets are assets that are continually turned over in the course of a business during normal business activity; they are in other words, the petitioner’s working capital. After thorough review, it was determined that the petitioner had insufficient funds to pay the beneficiary the proffered wage.

Counsel for the petitioner argued that by combining the petitioner’s net income with its net current assets, the petitioner had the ability to pay the proffered wage. However, the AAO did not accept that approach. The AAO’s view was that net income and net current assets are two different methods of establishing the ability to pay, and they cannot be combined to satisfy the ability to pay, its either one or the other. Accordingly, the petitioner had not met its burden, and the appeal was dismissed.